WASHINGTON (AP) — Sales of new U.S. homes edged up modestly in October, led by a big jump in activity in the Midwest.

New home sales advanced 0.7 percent last month to a seasonally adjusted annual rate of 458,000, the Commerce Department reported Wednesday. That October increase a smaller 0.4 percent gain in September and put sales at the highest point since May.

The strength last month stemmed from a big 15.8 percent increase in sales in the Midwest and a smaller 7.1 percent rise in the Northeast. Those increases offset a 1.9 percent fall in sales in the South, which accounts for half of the new-home market, and a 2.7 percent drop in the West.

The median price of a home sold in October was $305,000, up 16.5 percent from a year ago.

Housing has struggled to recover since the recession ended in June 2009. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing homes instead of upgrading. New home sales remain sharply below the annual rate of 700,000 seen during the 1990s.

In an encouraging sign, sales of existing homes rose 1.5 percent in October to a seasonally adjusted annual rate of 5.26 million, according to the National Association of Realtors. October marked the first month of 2014 in which sales of previously owned homes were higher than the same month in 2013.

A combination of factors has depressed sales. An unusually harsh winter crippled sales at the beginning of the year and even after the snow had melted, tight credit, rising home prices and flat incomes for many Americans have limited the number of buyers who could afford a home.